Category: Correspondence

My Lords, for more than a hundred years the people of Yeovil and South Somerset have provided the nation and the nation’s allies with world-beating aircraft which have played an immense part in the defence of our shores and of our values.

Yeovil-built aircraft were amongst the first to fly in battle over the Western front and provide air support for the Royal Navy. Westland Lysanders flew our secret agents into every corner of occupied Europe in WWII. Westland helicopters dropped me on Jebel tops in Arabia, plucked me out of clearings in the Borneo jungle and gave us the mobility we needed in Northern Ireland. They did the same in Afghanistan, Iraq and every other conflict zone.

This is not just the past, My Lords. It is also the future.

As we rely more on special forces, they will rely more on helicopters for long range insertion. As the Royal Marines end assaults on defended beaches, helicopters will be the only means to land men in numbers where they enemy does not expect them. As the Russian submarine threat grows, rotary wing will arm our ships with the best means of detection and response.

But this debate is not just about our armed forces needs. It is also about an irreplaceable national aero-space asset. The rotary wing skills found in Yeovil, are found nowhere else in Britain.

They are beginning to leave in numbers. And there is a reason for that.

Despite many requests from me and, I am assured, from Yeovil’s MP, Marcus Fysh, the Government has made no clear commitment, as part of the National Industrial Strategy, that they wish to sustain this unique sovereign ability to design, engineer and manufacture our own rotary aircraft.

This doubt about the Government’s intentions began when the MoD abandoned the policy of the Coalition Government which insisted that an MOD order for Apache aircraft must be subject to a proper competitive tendering process – replacing this with a decision to buy off the shelf without competitive tender, from the US.

Since then, every procurement action of the Government has re-enforced the suspicion that the MOD prefers to buy new aircraft from abroad than make them ourselves, even if the consequence is that a vital national asset is lost and the Yeovil site degenerates into a repair and maintenance facility only.

Over the years, Yeovil-built aircraft have been sold to over 20 countries. We are one of the nation’s major exporters. But what export customers now say, is if the British Government will not buy helicopters made in Britain, why should they?

This is not a problem for today. The shop floor has plenty of work for the moment.What we are short of is the engineering work needed now to prepare for and build the new aircraft for the future. What we need is a commitment from the Government that it prefers to buy the next range of aircraft from UK production, rather than from abroad

I cannot believe that the Government wishes to preside over the disappearance of a key national capability and prefers to make our armed forces dependant on foreign skills when we have such an abundance of our own.

Post-Brexit, they cannot wish to destroy export opportunities.

Yet that is where we are heading.

If this is not what the Government wants, then it is time to make that clear – urgently.

Leonardo, I am assured, are waiting to make the investment necessary in R&D, infrastructure and skills to maintain the long term integrity of Yeovil’s design and engineering teams. But as Leonardo’s managing Director said at Farnborough “We need some clear commitment [to a new helicopter strategy if we are],…to maintain the design and development capability of our work force.”

I appeal to the Government to make this statement without delay. Today for preference. In the Modernising Defence paper, due by the end of the month, if they must. In the Budget as a last resort.

I have to warn that if this, or something along these lines does not come by the end of the year then the crucial decisions Leonardo needs to make, may not be made, the erosion of Yeovil’s skill base will accelerate and a national strategic industrial asset will be in grave jeopardy.

In his answer the Minister may stress the Government’s Strategic Partnership Agreements – so called SPAs – and maybe even announce a new one.

SPAs are useful and they are welcome. But they are not the answer.

In their present form SPAs have no impact on the procurement process. That is where we need the action.

As part of the Government’s policy to maintain a national capability in the design and production of warships and combat jets, it requires front line commanders to consider indigenous industrial capability in making procurement decisions. This is what is needed and what has been so significantly absent in relation to rotary wing.

My Lords, led me, in summing up, lay out what is at risk here.

It is always looks cheaper to buy off the shelf. But in this case that would be, in the long term, far more expensive as we lose high value jobs, export opportunities and a key national asset.

It is not just Yeovil who stands to suffer from this.

Thousands of jobs and substantial high value high-tech industrial production elsewhere in the country is also at jeopardy. Leonardo currently spends more than a third of a billion pounds with suppliers all across the UK, 30% of which is with SMEs.

In the south of England alone, the total value of sub-contract business dependent on Yeovil amounts, to £275 million pounds.

What I am asking is simple.

The Government has a strategy for preserving our sovereign capacity in the production of fast combat jets.

It has one to preserve our ability to build warships.

What we need now – and urgently – is a clear statement from the Government that it values and will preserve Britain’s sovereign capability to design, engineer and manufacture our future rotary wing aircraft.

A key national aero-space industrial asset, providing the best for our armed forces, a work force whose skills have served the defence of the nation for more than 100 years, export opportunities, and tens of thousands of high-tech jobs across the country depend on it.

Paddy Ashdown voice concerns about the absence of any commitment to Yeovil and appeals to Marcus Fysh MP to join in a joint campaign to persuade the Government to change its mind

“Sometimes it is silence that speaks loudest.

This Industrial Strategy mentions Airbus, Rolls Royce, Boeing, Bombardier Aerospace, GE Aviation ,GKN, Loughborough and Solihull. But it mentions neither helicopters or Yeovil once. Given the worries about preserving the UK’s stand alone ability to manufacture helicopters and the integrity of the Yeovil site I have repeatedly lobbied the Government to use the opportunity of the Industrial Strategy to state clearly the Government’s commitment to maintaining the full capacity to manufacture helicopters on the Yeovil site, the UK’s only stand alone helicopter manufacturing facility and as such a key part of the country’s aerospace industrial base. No such commitment is contained in this strategy paper. To say that this is disappointing would be an understatement. Like many others in the Yeovil community I feel let down and angry about this omission.

I am now informed that this is paper is being published for consultation only. But bitter and long experience has taught me what that means. What we have been looking for is not consultation, but influence on the Government by our local MP. It is inconceivable that, under the coalition when David Laws was our MP, a national Industrial Strategy like this would have been published without a clear commitment to preserve the full range of capacities of the Yeovil site.

I have repeatedly asked our MP Marcus Fysh to put aside politics and work with all the other political voices in Yeovil, including the Unions, to lobby the Government on a joint basis to provide this vital commitment for the future. He has repeatedly declined to do so. Instead of action, we have had only repeated announcements of re-cycled news. The absence of a clear commitment to preserving of the full capacities of the Yeovil site is a very serious omission. I appeal to Mr Fysh again join us in a joint lobbying exercise to persuade the Government to change its mind.”

I am glad that you have now agreed that the AW159 tools and jigs will not be allowed to leave the Yeovil site for Poland unless and until there is a full in-depth study of the comparative costs of production on the two sites and that this will involve all relevant factors, such as the impact on the overheads of Leonardo’s Yeovil site, the costs both of transporting the tools and jigs to Poland and of transporting the assembled AW159 airframes back from Poland back to Yeovil for fitting out.

I am grateful to you for finally giving this undertaking which will, I know be welcomed, not just by the Leonardo workforce, but also by the Yeovil community at large. I also welcome this change of policy in favour of a proper competitive process, rather than repeating the procedure which applied when the Government foolishly gave the recent Apache order to the United States without any kind of tendering process.

One simple question. Given how much locally and nationally depends on this decision (not least because of what happened over the Apache order) I am sure you will agree with me that the Government should be as transparent about its forthcoming decision on the tools and jigs as possible. Of course I realise that the details of the relative costs which are incorporated into your decision cannot not be made public as they will be commercially confidential. But I hope you will be able, at the very least, to agree that, when you announce the decision, you will also make public the broad list of the factors which have been taken into account.

I would be most grateful if you would provide me with confirmation that you have no difficulty with publishing such a list at the appropriate time.

I have finally to express my surprise (and concern) that you have not been able to be more specific about the inclusion of a commitment to maintain a UK stand-alone ability to make helicopters, in the forthcoming and long awaited Industrial strategy. Given that our ability to make helicopters is a vital part of the nation’s aerospace industrial base, I am bewildered that you seem unable to give a clear answer to this crucial question at this late stage in the publication of the forthcoming White Paper. I am sure you will understand that the absence of such a
commitment, when the White Paper is finally published, will be treated with shock, even anger, in the Yeovil area and far beyond.

Commenting this afternoon on the MoD announcement of “new orders” for the Wildcat helicopter, Paddy Ashdown said:

“I am grateful to Minister Baldwin for making the journey from London to make this announcement. Of course any and every new order is welcome, especially in the difficult post-Brexit climate. But unfortunately these are not new orders. They are recycled news from the time of the Coalition. As the MoD themselves admit in their Press Release, this announcement merely enacts the detail of the deal negotiated by David Laws in 2012.

The issue for the Government is not, will they recycle old jobs as new ones, but will they use the leverage they have through the ownership of Wildcat tooling and jigs to stop Yeovil losing jobs which will otherwise go to Poland in order preserve not just the long term viability of the Yeovil site, but also a key element of the national aerospace industrial base.?

Of course the decision of where this work goes must be made commercially. But the Government can and should demand that any Leonardo decision which affects UK jobs is based on a proper in depth study of the comparative costs of manufacturing these Wildcat parts in Yeovil and Poland. I do not understand why they will not insist on this.

The Government’s unwillingness to use the leverage they have to go every last mile to protect Yeovil jobs, makes their promise to protect UK jobs in the post-Brexit era, mere empty words. I hope they will change their mind on this before these jobs and skills are exported abroad. Yeovil’s technicians and engineers have, for a hundred years, provided world beating aircraft for our armed forces. They deserve better than this.”

Thank you for finding time to meet with me yesterday to discuss the situation in Yeovil, following the GKN redundancies.

I was glad to hear of your work abroad to sell the AW159 Wildcat helicopter and to know that you believe this aircraft has wide market appeal in other countries.

But I am sure you will agree with me that it is vital that the benefit of the work and skill enhancement of these sales, if they are achieved, should benefit, not just Leonardo, but the Yeovil site and its workforce. You know my concerns on this matter, which I repeated to you in detail during our meeting. It seems to me that there is nothing in the Government’s Strategic Partnership Agreement with Leonardo which would in itself prevent Leonardo from effectively siphoning off technology assets and skills from Yeovil to Italy, while transferring Italian costs to the Yeovil site. I am, I should stress, NOT saying this is happening – only that the terms of the agreement as it stands means that it could happen – with very grave consequences for the Yeovil site as a whole. I accept, of course that any such “siphoning” strategy would be contrary to the spirit of the Strategic Agreement. But unhappily it is not, it appears, contrary to its letter. I asked you for an undertaking that the Government would keep a close oversight on the conduct of the Strategic Partnership in order to ensure that the Yeovil site is not disadvantaged. I hope you will be able to provide this in your response to this letter.

I also pressed you, as I have in my letters to the Secretary of State, for a clear undertaking that the forthcoming Government Green Paper on the national industrial strategy, due to appear you said before the end of the year, would include a clear statement that the Government regards Britain’s stand-alone ability to design, manufacture and assemble helicopters as an essential part of our national aero-space industrial base which should be preserved. I was, I confess, surprised to learn that, even at this late stage you were unable to provide this assurance, on the grounds that the Green Paper is being drafted by the Department for Business, Energy and Industrial Strategy. But surely it cannot be the case that, as Minister for Defence Procurement whose decisions have a profound impact on the country’s aero-space industry, that you have not had – and do not intend to seek – input into the Green Paper? I hope you will be able to re-assure me on this matter. If it were to be the case that there was no such statement in the Green Paper, then people would be bound to conclude that this Government, unlike its predecessors, was not fully committed to maintaining the full range of skills, integrated assembly and technology, which only the Yeovil can provide for the nation.

Finally, there is the matter of the GKN tooling for the AW 159 Wildcat work currently being carried out in Yeovil. This tooling is, as you know, essential for the production of the AW159. I pointed out to you the fact that the MoD owns this tooling gives the Government very substantial leverage over what happens next. It is open to the MoD, as owners of this tooling, to insist that it will not be shipped abroad, but maintained on the Yeovil site. This will, of course ensure that much the work involved will stay in Yeovil, rather than being allowed to leach away elsewhere, along with the technology and skills involved, We both agreed that the Government’s intention is to ensure that the Leonardo relationship should enable “the Yeovil group to continue to be a centre for the design and development of the AW159 and other aircraft”. I cannot see how this commitment could be fulfilled if the Government fails to use its ownership of the 159 tooling to ensure that the lost GKN work stays on the Yeovil site, instead of being shipped abroad, along with the jobs involved. I hope that you will be able to give me this undertaking in the near future.

The Right Hon Michael Fallon MP,
Secretary of State for Defence
Ministry of Defence,
Whitehall,
London,
SW1A 2HB

Wednesday, 19 October 2016

Dear Michael,

I hope you received my last letter and am sure you will have had my question in the Lords on the present situation in GKN Yeovil, brought to your attention.

I am grateful to you for arranging for me to speak today with Harriett Baldwin MP the Minister for Defence Procurement.

I am writing to you following that call to confirm my understanding of what was agreed with Minister Baldwin and to place on record my views of the urgent action that needs to be taken if we are to avoid a difficult situation in Yeovil, turning into a worse one is short order.

I do not wish to re-rehearse how we got into this situation. That was fully explained in my previous letter.

But I do want to express my concerns, substantially re-enforced after my conversation with Harriett Baldwin. I need to repeat my warning, shared by many others, that, absent a clear and imminent statement from the Government that it sees the maintenance of a full domestic capacity to design and build Helicopters in the UK (in effect in Yeovil since this the UKs only integrated base capable of doing this), then the consequence of the Apache decision, followed by the repatriation of GKN work to Italy, will be that Yeovil’s stand alone capacity to design and manufacture helicopters will risk being eroded.

Sub-contract work for other manufacturers has been and always will be, a key part of the work done in YeoviI. But this work, valuable though it is, will not be sufficient by itself to sustain the wide technological, design and skill base in Yeovil. I am sure that, given the Prime Minster’s stated intention to create a national industrial strategy, it cannot be the Government’s intention to undermine this base, even if by oversight, given the important contribution it makes to our national defence and aero-space industry.
In short, sub contract work for others is necessary, but it is not sufficient to preserve Yeovil’s crucial capacity to build helicopters.

The damage capable of being done as a knock on consequence of the Apache and Leonardo decisions could be very grave. But this is easily prevented if the Government now will, as a matter of urgency make a clear public statement along the lines I have suggested above.

Minister Baldwin told me that the forthcoming Green Paper on the Industrial strategy would contain words of comfort on this subject and asked me if I had seen these through my contacts with Leonardo. I have not. But I asked her if, in the light of the importance of this issue I might be allowed sight of these on a Privy Council basis. I hope you will agree to this. It would be extremely helpful if I might see them in the very near future.

One final question.

I mentioned to Minster Baldwin the very recent “tweet” from our local MP Marcus Fysh to the effect that that she had promised him “Big support for helicopter industry in #Yeovil. £3 billion being spent with Leonardo”. She confirmed to me that that this, as I understand it, is not in fact a new commitment relating to the present situation, but rather an already existing indicative estimate of likely expenditure over the period of the next decade. Perhaps you would be kind enough to confirm this.

I hope to hear from you in the near future.

Yours etc.

Paddy Ashdown

Lords Question My Lords, on the subject of the industrial strategy, I draw noble Lords’ attention to the situation in Yeovil, which is the last integrated site capable of designing, manufacturing and assembling helicopters. As a result of the Government’s short-sighted decision to grant the order for the Apache to the United States without any tendering whatever, the Italian owner, Leonardo, has now concluded that we do not seem interested in producing helicopters on a stand-alone site and is now shipping all the work on assembly back to Italy. What is needed now is the Government’s clear statement that they wish to see helicopters made in Britain, of British manufacture, for our Armed Forces, as they have been for nearly 50 years now.

The Right Hon Michael Fallon MP,
Secretary of State for Defence
Ministry of Defence,
Whitehall,
London,
SW1A 2HB

Wednesday, 12 October 2016

Dear Michael
I had hoped to see you to discuss the situation with Leonardo and GKN in Yeovil and its impact on Britain’s Aerospace industry. I understand that you cannot find time in your programme for an urgent meeting but have arranged a meeting in the near future with the Minister for Defence Procurement, Harriett Baldwin MP.

I am writing this letter to lay out the issues before that meeting.

I am extremely concerned that Britain’s stand alone capacity to manufacture helicopters, which has been for so long a vital part of our Aero-space industry, is in serious jeopardy, as a result of the events leading up to the recent Leonardo decision to ship back to Italy, all AW159 “Wild Cat” structure work currently being carried out at GKN Yeovil.

It may be helpful if I briefly rehearse how we got here.

You will recall that, during the Coalition Government, the MoD wished to purchase some Apache helicopters for the Army. You, as Minister for Business and Enterprise, agreed in 2014 that Westland should bid for this order on a commercial basis. Westland, were confident that they could easily compete with Boeing on price (you will be aware that their unit labour costs are significantly lower than those Boeing). But then, out of the blue MoD unilaterally insisted on (some say “engineered”) a new requirement which they knew could only be supplied by Boeing. This effectively ruled Westland out of the bidding, which MoD must have known when they insisted on this new requirement (the so-called wash-wipe system – which even the US Army does not have).

Vince Cable MP, as Minster for Business and Innovation and David Laws (the then MP for Yeovil), warned that the knock on consequence of this could endanger the capacity for stand-alone helicopter production and assembly at Yeovil, the only British integrated site capable of doing this. They proposed that the order should not be awarded to the US until there was a full tendering process. The then Chief Secretary for the Treasury, Danny Alexander MP agreed and insisted that competitive tendering should take place before the order was awarded. You were at the time HYPERLINK “https://en.wikipedia.org/wiki/Minister_(government)”Minister for HYPERLINK “https://en.wikipedia.org/wiki/Department_for_Business,_Innovation_and_Skills”Business and Enterprise and, I understand, strongly supported this course of action. You made it clear at the time “that defence procurement should be seen as linked to industrial strategy” and not driven solely by the dictates of the MoD’s civil servants. Quite so.

Despite all this, the new Conservative Government, once elected, placed the order with Boeing – without further ado and without any tendering process. I am not sure what local political lobbying the Government received opposing this decision at the time. But if they did receive any, they clearly ignored it.

The Government’s decision to buy from Boeing instead of a potentially cheaper UK option was a bizarre and short sighted decision, even by the standards of the time.

But in the present post-Brexit climate it is even more inexplicable. We should surely now be doing all we can to boost exports? The message that was sent to the world when the current Government insisted that a competitive U.K. Company, who was a successful Prime Contractor on the Apache for many years including during wars, had been deselected as MoD’s Prime Contractor, was devastating.

Many of us warned at the time that the current owners of the “Westland” site, the Italian firm Leonardo, would conclude that the UK Government was not committed to helicopter production in the UK and act accordingly.

This, I regret to say, is exactly what has now happened. In the absence of a clear commitment, spoken or tacit, from the UK Government to continued helicopter production in the UK, Leonardo has now, I am told, felt it necessary to respond heavy pressure from Government and political circles in Italy to move all “Wild Cat” structure work back home.

The consequences of this decision, not just for the Yeovil site, but also for an essential part of Britain’s aero-space industry – and for our national capacity to design, create, build and assemble our own helicopters – are, I believe, very serious.

The Prime Minister has announced that she wishes to see a national industrial strategy. This is very welcome news. But now we have to make her words a reality. If the Government will not now act to make it clear that they regard the maintenance of a stand lone, helicopter manufacture and assembly capacity as a vital part of our national high tech and aerospace industrial base, then I fear many will conclude that the Prime Minister’s claim to have an industrial “Industrial Strategy” will seem no more than hollow words.

The GKN workers are highly skilled and we are an enterprising community. With energetic work from the local Council and others we will be doing our best to ensure that those who have lost their jobs, find new ones, preferably in Yeovil the area.

What is at risk here is, however much more than damage to the Yeovil and south Somerset community.

Without a clear Government statement that it is committed to maintaining a stand-alone UK capacity for helicopter design and production, I fear we may be placing in jeopardy a vital part of our national industrial and technological base, along with the ability to procure for our armed forces the vital equipment they need on the battlefield, from British sources.

The Yeovil “Westland” site and its workforce have loyally served the nation’s defence interests for more than a 100 years. Its aircraft and equipment have been used by our armed forces in every conflict we have fought in the last century (as I recall myself in the little conflicts in which I was involved in Aden and Borneo and in my service in Northern Ireland). We look to the Government now for a clear statement that it understands the importance of that contribution and will do whatever is necessary to support and preserve the nation’s helicopter industry.

This matter is now of great urgency. I hope to receive assurances from you and the Government on this in the very near future.